Tomorrow, BP holds its Annual General Meeting (AGM) in London. BP shareholders are gathering at a time of mounting pressure on major fossil fuel companies to begin to plan for a world free from carbon pollution—as evidenced by last week’s vote by a majority of Occidental Petroleum shareholders in favor of a resolution urging the company to assess how the company’s business will be affected by climate change.
BP was one of eight companies that UCS assessed in the inaugural edition of The Climate Accountability Scorecard, released last October. BP responded to our findings and recommendations, but left important questions unanswered. Here are four questions that we hope BP’s decision makers will address at the AGM.
1) What is BP doing to stop the spread of climate disinformation—including by WSPA?
BP 2016 Score: Poor
In its own public communications, BP consistently acknowledges the scientific evidence of climate change and affirms the consequent need for swift and deep reductions in emissions from the burning of fossil fuels. BP left the climate-denying American Legislative Exchange Council (ALEC) in 2015 (without explicitly citing climate change as its reason for leaving).
Still, the company maintains leadership roles in trade associations and industry groups that spread disinformation on climate science and/or seek to block climate action.
For example, the Western States Petroleum Association (WSPA) made headlines in 2015 for spreading blatantly false statements about California’s proposed limits on carbon emissions from cars and trucks. The association employed deceptive ads on more than one occasion to block the “half the oil” provisions of a major clean-energy bill enacted by California lawmakers.
In response to a question at last year’s AGM about the misleading tactics of WSPA in California, CEO Bob Dudley said, “of course we did not support that particular campaign.” Yet according to the most recent data available, BP remains a member of WSPA and is represented on its board of directors.
Shareholders should be asking how BP communicated its disapproval of WSPA’s tactics in California to the association, and how WSPA responded. And how is BP using its leverage on the board of WSPA to end the association’s involvement in spreading climate disinformation and blocking climate action?
BP is also represented on the boards of the American Petroleum Institute (API) and the National Association of Manufacturers (NAM), both of which are named defendants in a lawsuit brought by youth seeking science-based action by the U.S. government to stabilize the climate system.
2) Why did BP fund an attack on disclosure of climate-related risks and opportunities?
BP 2016 Score: Fair
BP—along with Chevron, ConocoPhillips, and Total SA—funded a new report criticizing the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). The TCFD was set up by the Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, in recognition of the potential systemic risks posed by climate change to the global economy and economic system. Through an open, collaborative process, the TCFD is recommending consistent, comparable, and timely disclosures of climate-related risks and opportunities in public financial filings.
A broad range of respondents in the TCFD’s public consultation supported its recommendations, and on Monday the We Mean Business coalition issued a statement expressing support for the TCFD recommendations and calling for G20 governments to endorse them. Members of We Mean Business include BSR (Business for Social Responsibility) and the World Business Council for Sustainable Development—both of which, in turn, count BP among their members.
Meanwhile, US Chamber of Commerce will reportedly roll out the oil and gas company-sponsored report at an event this week. (We found no evidence that BP is a member of the US Chamber).
In its own financial reporting, BP provides a detailed analysis of existing and proposed laws and regulations relating to climate change and their possible effects on the company, including potential financial impacts, and generally acknowledges physical risks to the company, including “adverse weather conditions,” but does not include discussion of climate change as a contributor to those risks.
So where does BP stand on climate-related disclosures? The company’s shareholders and the business community at large deserve to know, and tomorrow’s AGM is a good opportunity for CEO Bob Dudley to explain why BP’s funding isn’t aligned with its stated positions.
3) How is BP planning for a world free from carbon pollution?
BP 2016 Score: Poor
Both directly and through its membership in the Oil and Gas Climate Initiative, BP has expressed support for the Paris Climate Agreement and its goal of keeping warming well below a 2°C increase above pre-industrial levels.
Last month, the company signed a letter to President Trump supporting continued U.S. participation in the Paris Climate Agreement.
BP has adopted some modest measures to reduce greenhouse gas emissions from its internal operations. The company has set a cost assumption of $40 per tonne of CO2-equivalent for larger products in industrialized countries, but it is not clear whether BP applies the price to all components of the supply chain.
The company has undertaken efforts to reduce emissions as part of the “Zero Routine Flaring by 2030” pledge, reports annually on low-carbon research and development, and offers a limited breakdown of greenhouse gas emissions from direct operations and purchased electricity, steam, and heat for a year.
Yet BP has no company-wide plan for reducing heat-trapping emissions in line with the temperature goals set by the Paris Climate Agreement. BP’s April 2017 Sustainability Report does little to address BP’s long-term planning for a low-carbon future. CEO Bob Dudley continues to insist that “we see oil and gas continuing to meet at least half of all demand for the next several decades.”
BP’s Energy Outlook webpage confirms that the company’s “Most Likely” demand forecasts, plans for capital expenditure, and strategic priorities plan on a greater-than-3°C global warming scenario. BP also fails to provide a corporate remuneration policy that incentivizes contributions toward a clean energy transition (read ShareAction’s thorough and thoughtful analysis of BP’s remuneration policy here).
We look forward to hearing how BP responds to shareholder questions about the misalignment of its business plans and executive incentives with its stated commitment to keeping global temperature increase well below 2°C.
4) When will BP advocate for fair and effective climate policies?
BP 2016 Score: Good
BP consistently calls for a government carbon policy framework, including a global price on carbon, as a policy it supports, and touts its membership in the Carbon Pricing Leadership Coalition.
The question here is simple: when will BP identify specific climate-related legislation or regulation that it supports, and advocate publicly and consistently for those policies?
We will be awaiting answers from BP’s leadership at tomorrow’s AGM.